Last week saw prices rebound as gas fields in Holland looked to drop production. Although prices were lower earlier in the week, a rebound came on the back of the Dutch news, specifically considering a cap on the Groningen gas field. Oil picked up on the news of anticipated storage falls in America - having expected a gain increase after the passing of Hurricane Hermine. Brent finished 4.5% down - $45.77 per barrel.
The UK saw gas prices drop after the news from Holland. Short term prices bounced back up abruptly. Electricity prices moved away from gas right from the beginning for the week as buyers worried about generation margins.
Wind farm and nuclear output were down so when a coal power station failed, prices jumped on the shorter contracts on Wednesday and Thursday. All contracts saw upward movement but specifically on shorter dated ones, with this winter (2016) moving up by 6%.
Fears increase over the possibility of a tight electricity system in winter 2016, fuelling price volatility and as market fundamentals indicate wholesale prices have remained at some of the lowest of the last decade, clients may want to still consider to fixing their contracts and looking to the long term.